Hello traders! The price of gold has been moving down since XAU/USD topped out on August 7, when testing $2075 high. At that stage, the price has cleanly rejected the 427.2% Fibonacci retracement level applied to the corrective wave down after triangle breakout.
After rejection price went down sharply and reached the $1862 low. But then Gold went up and rejected the 23.6% Fibonacci retracement level applied to the July 14 – August 7 upside wave. Currently, $2015 should be acting as the key level, because only daily break and close above can result in the long term uptrend continuation. But as long as the price remains below, the correctional move will be extended further.
Gold is likely to consolidate for the time being, and at some point in time should test the uptrend trendline and the 38.2% Fibonacci resistance at $1966. This could be the strong supply zone for XAU, which can provide a selling opportunity for speculators.
If $1966 level will be rejected, the price can drop towards the $1791 support, which is 127.2% Fibonacci retracement level corresponding to the uptrend trendline.
Bias: Berish as long as daily close remains below $2015
Potential Resistance Zone: 1970 – 1965
Potential Targets: 1791
Have a profitable trading!